Investment Decisions on Illiquid Assets: A Search by Jaroslaw Morawski, Prof. Dr. Heinz Rehkugler

By Jaroslaw Morawski, Prof. Dr. Heinz Rehkugler

Actual property, inner most fairness, arts, or even wine are gaining expanding recognition as capital investments. appealing risk-return profiles and excessive diversification potentials cause them to beneficial additions to funding portfolios. Their major trouble, in spite of the fact that, is the low point of liquidity. Such resources can't be received or bought speedy with out compromising huge parts in their price. regardless of its excessive functional relevance, this factor has up to now bought in simple terms little recognition from researchers.

Show description

Read or Download Investment Decisions on Illiquid Assets: A Search Theoretical Approach to Real Estate Liquidity PDF

Similar macroeconomics books

Modern Macroeconomics

Greater than a decade after the booklet of the severely acclaimed a contemporary advisor to Macroeconomics, Brian Snowdon and Howard Vane have produced a worthwhile successor within the kind of smooth Macroeconomics. completely prolonged, revised and up to date, it is going to turn into the imperative textual content for college students and lecturers of macroeconomics within the new millennium.

Macroeconomics

Mankiw’s Macroeconomics has been the number 1 booklet for the intermediate macro direction because the ebook of the 1st variation. It keeps that bestselling prestige by means of always bringing the vanguard of macroeconomics idea, examine, and coverage to the school room, explaining advanced recommendations with unheard of readability.

Reformist Voices of Islam: Mediating Islam and Modernity

Lately, Islamic fundamentalist, innovative, and jihadist hobbies have overshadowed extra average and reformist voices and tendencies inside Islam. This compelling quantity introduces the present new release of reformist thinkers and activists, the highbrow traditions they bring about on, and the explanations for the failure of reformist pursuits to maintain extensive help within the Islamic international at the present time.

Unemployment Fluctuations and Stabilization Policies: A New Keynesian Perspective (Zeuthen Lectures)

The prior fifteen years have witnessed the increase of the hot Keynesian version as a framework of reference for the research of fluctuations and stabilization guidelines. That framework, which mixes the rigor and inner consistency of dynamic basic equilibrium versions with such normally Keynesian assumptions as monopolistic pageant and nominal rigidities, makes attainable a significant, welfare-based research of the results of economic coverage ideas.

Additional resources for Investment Decisions on Illiquid Assets: A Search Theoretical Approach to Real Estate Liquidity

Example text

Condominium investments in selected German urban areas have been chosen for this purpose. The analysis of their liquidity gives also the opportunity to discuss problems arising in the implementation of the search theoretical approach. Determination of the values of model parameters constitutes the main difficulty. Although their interpretations within the search model are relatively straightforward, some of them cannot be observed directly. The necessity to fall back on measurable proxies results in further sources of biases.

24. While the former ones become active only if the current market price drifts away from the fair valuation of the asset, the latter ones buy and sell (to some extent) independently of the market price level. As noted by Black (1986), a market with full information and without noise, no matter how big, would be extremely illiquid. If prices fell below the fair value, everybody would like to buy; if prices rose above the fair value, everybody would like to sell; and with prices at the fair level, nobody would have an incentive to trade.

It constitutes an important part of many theories of market microstructure and is present in numerous models; see Copeland/Galai (1983), Kyle (1985), or Glosten/Milgrom (1985). See also O’Hara (1997), Chapter 3, for a review. , transactions of larger blocks of shares. See Dann et al. (1977), Holthausen et al. (1987), or Keim/Madhavan (1996). See also O’Hara (1997), pp. , for a review. 1 Definition of Liquidity 23 Price tion size exists above which an inferior price has to be accepted and the impact of trading becomes relevant.

Download PDF sample

Rated 4.33 of 5 – based on 16 votes